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EU-GSP+ Case Models

Overview of the EU-GSP + Case Model

This case model aims to establish production bases in the Philippines and export products manufactured in the Philippines to the European Union (EU), leveraging the Generalized Scheme of Preferences Plus (GSP+) agreement to maximize tax benefits. Specifically, it allows Chinese companies to avoid the high base tariffs when exporting to the EU and instead benefit from lower tariffs through the Philippines.

Market Analysis

Philippines → GSP+ Agreement → EU Philippines → GSP+ Agreement → EU
Philippines GSP+ Agreement

The Philippines offers the opportunity to export various products at reduced tariffs through the GSP+ agreement with the EU. This enhances the price competitiveness of products manufactured in the Philippines.

China → GSP+ Agreement(X) → EU China → GSP+ Agreement(X) → EU
Lack of China-EU FTA

China does not have a free trade agreement (FTA) with the EU, resulting in the application of basic tariffs. Therefore, Chinese companies need to utilize the Philippines to reduce their tax burdens.

EU-GSP+ Case Model

This case model aims to establish production bases in the Philippines and export products manufactured in the Philippines to the European Union (EU), leveraging the Generalized Scheme of Preferences Plus (GSP+) agreement to maximize tax benefits. Specifically, it allows Chinese companies to avoid the high base tariffs when exporting to the EU and instead benefit from lower tariffs through the Philippines.

Establishing a Manufacturing Base

Chinese companies will set up manufacturing facilities in the Philippines to reduce production costs and produce goods locally.

Quality Control

Implement a rigorous quality management system to ensure products meet EU quality standards.

Logistics and Distribution

Develop an efficient logistics system for exporting products from the Philippines to the EU, optimizing maritime transport and customs.

Revenue Model 1

Tax Savings

By exporting products manufactured in the Philippines to the EU under the GSP+ tariff, companies can reduce tax burdens and reflect these savings in pricing to enhance competitiveness.

Revenue Model 2

Product Diversification

Establish a diverse range of product lines that can be manufactured in the Philippines to secure multiple revenue sources.

Case Model Diagram

1.Utilizing the Production Base : China(Exporting Country(X)) → Philippines(Production Base, Exporting Country) →  EU(Importing Country), 2.Non-utilization of the Production Base : China(Exporting Country(X)) →  Production Base((X)) →  EU(Importing Country) 1.Utilizing the Production Base : China(Exporting Country(X)) → Philippines(Production Base, Exporting Country) →  EU(Importing Country), 2.Non-utilization of the Production Base : China(Exporting Country(X)) →  Production Base((X)) →  EU(Importing Country)

Example Products for the Case Model

[Model 1] Automotive Parts HS 8708.99

Automotive Parts Image
Automotive Parts HS 8708.99
Category Basic rate GSP+ rate Utilization of the Production Base
Export
from China
3.5% Non-application no
Export from
the Philippines
12% 0% yes

[Model 2] Cashmere Cardigan HS 6110.12

Cashmere Cardigan Image
Cashmere Cardigan HS 6110.12
Category Basic rate GSP+ rate Utilization of the Production Base
Export
from China
12% Non-application no
Export from
the Philippines
12% 0% yes

[Model 3] Dried Pineapples HS 0804.30

Dried Pineapples Image
Cashmere Cardigan HS 6110.12
Category Basic rate GSP+ rate Utilization of the Production Base
Export
from China
5.8% Non-application no
Export from
the Philippines
5.8% 0% yes
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